Solana is a public and high-throughput layer-1 blockchain platform with smart contract functionality. Its native cryptocurrency is SOL. This open-source project was launched in 2017 and is currently run by the Solana Foundation based in Geneva. Solana is often compared to Ethereum, but while Ethereum has the first mover advantage, Solana has strong distinct advantages over it in terms of transaction speed and costs.
The Solana network uses an iteration of the Proof-of-Stake (PoS) consensus mechanism called delegated-Proof-of-Stake (dPoS). This network also incorporates an innovative Proof-of-History (PoH) timing mechanism that is implemented prior to, and facilitates, its Proof-of-Stake (PoS) protocol structure. Proof-of-History (PoH) is a sequence of computation that can provide a way to cryptographically verify the passage of time between two events. Discover more info in the Solana Whitepaper.
Anyone can delegate some SOL tokens to a validator (or “vote account”) that participates to the consensus of the Solana chain. A vote account cannot be selected as a leader if no SOL are delegated to it. The more stake assigned to the validator, the more often it is chosen to write new transactions, and therefore the more it earns rewards.
Proof-of-Stake protocols use staking to create consensus. By locking native tokens into a smart contract you earn the right to secure a chain and earn rewards on your stake. Due to its environmental efficiency, staking has overtaken mining and is used far more often in newer protocols.
By locking a protocol’s native tokens (ie SOL) to give “validators” the right to secure a chain. Validators propose new blocks or attest other validators’ blocks, gaining rewards for doing so.
Staking generates one of the safest and most predictable ways to get rewarded in the crypto space and is considered a safe way to build capital. It is the most natural feature in crypto as the value originates from the blockchain’s native currency inflation. You help secure the network and earn rewards by staking your SOL.
Not staking holds back the network’s inflation. Your token share will be diluted among other people’s tokens that are being staked and accumulating new tokens into the network.
If you do not stake, your assets will be eroded from protocol inflation.
There is no minimum token requirement to delegate. You can start staking with as little as 0.01 SOL. To stake SOL, you’ll only need to access Kiln dashboard. Select the Account you want to stake on and the amount of SOL and connect your wallet:
To unstake, you simply need to undelegate into one transaction, after 2 epochs you will receive your original stake back in your wallet as well as accumulated rewards from delegation.
Detailed information about Kiln validators can be found here.
As an incentive for helping to safeguard the network, you can earn up to 7.73% GRR* from each validator you stake on Kiln. (Source: https://protocolstaking.info/)
Kiln is the leading enterprise-grade staking platform, enabling institutional customers to stake SOL, and to white-label Solana staking functionality into their offering. Our platform is API-first and enables fully automated validators, rewards, data and commission management.
We are serving thousands of businesses worldwide so that everyone can securely and seamlessly. Our clients can stake their coins from our dashboard, a hardware wallet, a browser wallet, a B2B custodian, a crypto exchange or just their favorite investment app. Kiln makes staking Solana easy, secure, and accessible to everyone.
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Proof-of-Stake (PoS) is a type of consensus mechanism used to validate cryptocurrency transactions. Through PoS, validators can contribute to the block production of a chain while keeping environmental concerns to a minimum, which is becoming an increasingly large issue in Proof-of-Work, the consensus algorithm used in Bitcoin.
By staking capital rather than energy, validators risk losing a portion of their value and future potential for staking by misbehaving while creating blocks. This incentivizes collaboration and minimizes malicious activity in the consensus process.
Both are consensus algorithms, helping to democratize participation in securing a blockchain. dPoS is an iteration of PoS combining real-time voting with a system based on reputation to reach consensus across the blockchain. Voting power is still determined by how many tokens they have however.
SOL rewards are issued once per epoch in your staking account, meaning SOL rewards compound. An epoch of time in Solana is approximately two days. Note that the staking yields vary for each epoch as the inflation rate and total active stake change.
Yes, the interest you earn over each reward period is added to the principal balance so that eventually you earn interest on your interest, and can grow your wealth exponentially.
Solana implements a slashing mechanism for poor promotion. This includes downtime for validators and their delegators and for nodes that attempt to vote on two separate attestations at the same time. Slashed validators will add bonded tokens to the mining pool.
Slashing also occurs if Solana’s Proof-of-History generates an invalid hash.
You can start staking SOL with 0.01 SOL and there is no maximum stake.
You can maintain custody of your SOL through any wallet or custodian solution of your choosing. Kiln’s SOL staking is non-custodial, only you can access your funds by controlling the underlying wallet which holds a claim to the funds.
It will take between 1 and 2 epochs for your SOL to be unstaked (48-96 hours).
For every slot, the validator is expected to sign attestations. If submitted attestations are good, the validator receives rewards, otherwise it receives penalties. In case the validator is offline it will also receive penalties.
The average block time on Solana is ~400 milliseconds.
There are no strict minimum amounts of SOL required to run a validator on Solana. However, in order to participate in consensus, a vote account is required to have a rent-exempt reserve of 0.02685864 SOL. Voting also requires sending a vote transaction for each block that the validator agrees with, which can cost up to 1.1 SOL per day. From an infrastructure point of view, a vote account is defined by 3 keypairs:
In the context of Proof-of-Stake blockchains, the gross reward rate (GRR) refers to the total or gross amount of rewards earned from staking before deducting any fees or expenses. This is a reward rate that fluctuates with the operations of the protocol and the performance of validators, it is not set by Kiln. The net reward rate (NRR), on the other hand, takes into account the deductions or expenses, providing a measure of the actual rewards received after subtracting fees or costs.